Tuesday, April 17, 2007

Cultural Markets

I was forwarded an interesting article today from the New York Times on Cumulative Advantage in marketplace success. Its an interesting read about social influence on creation of 'hits'. It is based on a a study done that claims that reliable hit prediction is impossible, no matter how much you know.

Conventional marketing wisdom holds that predicting success in cultural markets is mostly a matter of anticipating the preferences of the millions of individual people who participate in them. From this common-sense observation, it follows that if the experts could only figure out what it was about, say, the music, songwriting and packaging of Norah Jones that appealed to so many fans, they ought to be able to replicate it at will. And indeed that’s pretty much what they try to do. That they fail so frequently implies either that they aren’t studying their own successes carefully enough or that they are not paying sufficiently close attention to the changing preferences of their audience.

The common-sense view, however, makes a big assumption: that when people make decisions about what they like, they do so independently of one another. But people almost never make decisions independently — in part because the world abounds with so many choices that we have little hope of ever finding what we want on our own; in part because we are never really sure what we want anyway; and in part because what we often want is not so much to experience the “best” of everything as it is to experience the same things as other people and thereby also experience the benefits of sharing.

The concepts discussed in this article have a very similar ring to the concept of social epidemics put forth by Malcolm Gladwell in his book The Tipping Point, however, the interesting part about this study is how 'hit' outcome would never be the same if repeated due to changing conditions and the and the influence of the (cultural) market itself.

If markets not only reveal our preferences but also modify them, then the relation between what we want now and what we wanted before — or what we will want in the future — becomes deeply ambiguous.

For business's it doesn't mean we should stop trying to predict future results or measure information from the past, but it is important to be aware of cultural market effects and the relative impact on your product or service.

No comments: